Techniques have been worked out allowing isolation, characterization and quantitation of precursor cells to adipocytes in adipose tissue. By using these techniques information can be obtained about factors regulating the development of adipose tissue. Adipocyte formation is increased by the addition in vitro of prostaglandin E1, isobutylmethylxanthine, heparin, insulin and dibutyrylcyclic AMP. During development in culture these cells obtain several functional characteristics of adipocytes at confluence. Lipoprotein lipase shows a dramatic increase to a 1000-fold the activity before confluence and 50-fold the activity of mature fat cells. Fatty acid synthesis from glucose is occurring but is not very pronounced. Hromone sensitive lipase activity is appearing at confluence also. As a "biproduct" endothelial cells have been isolated from adipose tissue. These cells have typical morphology. They have low or no triglyceride synthetizing and hydrolysing activities. Lipoprotein lipase from fat cell can probably be bound to these cells.